Discounts on Vendor Central: Types and Fees

Discounts are an integral part of the sales strategy on Amazon Vendor Central. Properly setting them up can help increase competitiveness, attract new customers, and improve sales results. However, discounts also come with additional fees that should be considered in profitability analysis. In this article, we present the types of discounts available on Vendor Central and the associated fees

Types of Discounts on Amazon Vendor Central

1. Promotional Discounts (percent off)
   
   
   

   • Allows you to set a percentage discount on selected products, e.g., 20% off.
     
     
     

   • Used in campaigns promoting larger purchases, e.g., "20% off all products in this category."
     
     
     

   • You can set these at any time during the year, adapting them to seasonality or sales goals.
     
     
     

2. Vouchers
   
   
   

   • Discount coupons assigned to specific products.
     
     
     

   • They can offer a percentage discount (e.g., 15%) or a fixed amount discount (e.g., 10 USD).
     
     
     

   • Displayed on product pages, increasing visibility and encouraging customers to purchase.
     
     
     

3. B2B Discounts
   
   
   

   • Targeted at businesses, such as wholesalers or stores.
     
     
     

   • Discounts are available to registered business customers on Amazon Business.
     
     
     

   • These may include various discount levels based on the quantity ordered.
     
     
     

4. Amazon Events
   
   
   

   • Special discounts offered during events like Black Friday, Prime Day, or seasonal sales.
     
     
     

   • These require prior arrangements and negotiations with Amazon, often through a Vendor Manager.
     
     
     

   • If the discount setup is rejected in the panel, it's worth contacting support or your Vendor/Account Manager.
     
     
     

   • Each type of discount offers various possibilities for tailoring your offer to the target audience and current sales goals.
     
     
     

Fees Associated with Discounts

Using discounts on Amazon Vendor Central comes with additional costs that should be considered when calculating profitability. Here are the most important ones:

• Handling Fees – Costs related to Amazon’s management of discounts.
  
  
  

• Promotion Fees – For placing products in events like Prime Day.
  
  
  

• Reduced Margin – Discounts lower the profit per unit sold, so it’s important to calculate their impact on overall profitability.
  
  
  

How to Calculate Profitability?

1. Analyze what additional costs are generated by each type of discount.
   
   
   

2. Consider the expected increase in sales resulting from the promotion.
   
   
   

3. Compare potential profits with losses due to lower prices.
   
   
   

Example: Promotional Discounts in Practice

Imagine you offer a 20% discount on a popular product during Black Friday. Here’s what you need to consider:

• Discount Costs: If the product costs 100 USD, the discount is 20 USD per unit.
  
  
  

• Amazon Fees: Add handling fees and promotion costs.
  
  
  

• Increased Sales: If sales increase by 50%, check if the boost compensates for the lower margin.
  
  
  

Conclusion: Is It Worth Using Discounts?

Discounts on Amazon Vendor Central are an effective promotional tool but require the right approach. Key considerations include:

• Choosing the type of discount based on the campaign goal and target audience.
  
  
  

• Factoring in all costs associated with discounts to ensure their profitability.
  
  
  

• Regularly monitoring results and making adjustments to maximize profits.
  
  
  

Properly planned discounts not only boost sales but also create positive customer experiences and strengthen the competitiveness of your offer.